UK economy picks up after winter freeze

LONDON (AP) - Britain's economy accelerated in the second quarter as warmer weather fueled construction and consumer spending after snow and ice curtailed activity in March.

The Office for National Statistics said Friday that gross domestic product expanded by 0.4 percent in the three months through June compared with the previous quarter, when growth was 0.2 percent. The key services sector grew by 0.5 percent, and construction jumped by 0.9 percent.

"The economy picked up a little in the second quarter with both retail sales and construction helped by the good weather and rebounding from the effects of the snow earlier in the year," said Rob Kent-Smith of the ONS. "However, manufacturing continued to fall back from its high point at the end of last year and underlying growth remained modest by historical standards."

Kent-Smith noted that the U.K.'s trade deficit noticeably worsened as exports of cars and planes declined while import rose.

The report comes a week after the Bank of England raised interest rates for the second time since the financial crisis, saying recent data showed the economy had rebounded from the first quarter's "temporary" slowdown. The hike pushed the rate up to 0.75 percent, which is still low by historical standards.

U.K. economic growth lags that of other major industrialized nations amid uncertainty over Britain's departure from European Union. Economists fear consumers and businesses will restrict spending amid growing concerns that Britain will leave the bloc without an agreement on future trading rules.

Surveys suggest that Brexit is weighing on confidence.

"The level of business optimism remains stubbornly subdued by historical standards, largely reflecting widespread concerns relating to Brexit," said Chris Williamson, economist at IHS Markit, which publishes a survey of business activity.

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